Advisers have begun making compensation payments which will eventually reach £31m as part of the Arch cru consumer redress scheme, says the FCA.
A total of £31.47m is to be paid out by advisers to people who invested in the CF Arch cru Investment and Diversified funds because of unsuitable advice.
Consumers have so far received over £8.26m from advisers according to the FCA.
The money paid out under the scheme, which was overseen by the FCA, is in addition to any redress investors may have received under a separate process administered by Capita Financial Managers.
Clive Adamson, director of supervision at the FCA, said: "The vast majority of firms have co-operated with us, helping ensure that this compensation scheme has progressed as smoothly as possible.
"We're now seeing compensation flow to those investors who were mis-sold.
"We will continue to monitor progress to ensure consumers affected by Arch cru receive redress as quickly as possible."
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Under the consumer redress scheme 3,414 sales have been reviewed by firms and 85.4% of these have been found to be unsuitable.
Arch cru funds were high-risk products that typically invested in non-mainstream assets such as private equity and private finance. Advisers should only have recommended the funds to investors who fully understood and were willing to accept the risks.
However, the regulator found the funds were unsuitably sold to some investors as low or medium risk products.
The FCA, and its predecessor, stepped in to ensure affected investors received redress, in line with its objective to secure an appropriate degree of protection for consumers.
In July 2013, 353 firms informed the FCA that they had clients who qualified under the scheme.
Letters were then sent every one of the 7,124 affected investors inviting them to opt-in, 47.8% chose to do so (3,405 investors).
Firms had until 9 December 2013 to review the advice for these clients and submit their assessments to the FCA for redress to be calculated where appropriate.